At the beginning of the year, your company borrows $19,500 bysigning a Three-year promissory note that states an annual interestrate of 8% plus principal repayments of $6,500 each year. Interestis paid at the end of the second and fourth quarters, whereasprincipal payments are due at the end of each year. How does thisnew promissory note affect the current and non-current liabilityanounts reported on the classified balalnce sheet prepared at theend of the first quarter?
-Increased current liabilities by $390.00; increase non-currentliabilities by $19,500
-Increased current liabilities by $1,560; increase non-currentliabilities by $19,500
-increase current liabilities by $6,890.00; increaes non-currentliabilities by $19,500
-Increase current liabilities by $6,890.00; increase non-currentliabilities by $13,000
At the beginning of the year, your company borrows $19,500 bysigning a Three-year promissory note that states an annual interestrate of 8% plus principal repayments of $6,500 each year. Interestis paid at the end of the second and fourth quarters, whereasprincipal payments are due at the end of each year. How does thisnew promissory note affect the current and non-current liabilityanounts reported on the classified balalnce sheet prepared at theend of the first quarter?
-Increased current liabilities by $390.00; increase non-currentliabilities by $19,500
-Increased current liabilities by $1,560; increase non-currentliabilities by $19,500
-increase current liabilities by $6,890.00; increaes non-currentliabilities by $19,500
-Increase current liabilities by $6,890.00; increase non-currentliabilities by $13,000
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